-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UNlruA4wXLievYEy4CJNUfBomZar5yak0q8gRf692g4MtjRdcRbpIo3BeXKE+26a eJSwZ4Tb0Ap0xmoOJ1cXmw== 0000950114-96-000053.txt : 19960315 0000950114-96-000053.hdr.sgml : 19960315 ACCESSION NUMBER: 0000950114-96-000053 CONFORMED SUBMISSION TYPE: DEFA14A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19960314 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MONSANTO CO CENTRAL INDEX KEY: 0000067686 STANDARD INDUSTRIAL CLASSIFICATION: CHEMICALS & ALLIED PRODUCTS [2800] IRS NUMBER: 430420020 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEFA14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-02516 FILM NUMBER: 96534546 BUSINESS ADDRESS: STREET 1: 800 N LINDBERGH BLVD CITY: ST LOUIS STATE: MO ZIP: 63167 BUSINESS PHONE: 3146941000 FORMER COMPANY: FORMER CONFORMED NAME: MONSANTO CHEMICAL CO DATE OF NAME CHANGE: 19711003 DEFA14A 1 ADDITIONAL DEFINITIVE PROXY MATERIAL 1 SCHEDULE 14A (Rule 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant /X/ Filed by a Party other than the Registrant / / Check the appropriate box: / / Preliminary Proxy Statement / / Confidential, for Use of the Commission Only (as permitted by / / Definitive Proxy Statement Rule 14a-6(e)(2)) /X/ Definitive Additional Materials / / Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12 Monsanto Company --------------------------------------------------------- (Name of Registrant as Specified In Its Charter) --------------------------------------------------------- (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): / / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or Item 22(a)(2) of Schedule 14A. / / $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). / / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. 1) Title of each class of securities to which transaction applies: ------------------------------------------------------------------------ 2) Aggregate number of securities to which transaction applies: ------------------------------------------------------------------------ 3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11: (Set forth the amount on which the filing fee is calculated and state how it was determined): ------------------------------------------------------------------------ 4) Proposed maximum aggregate value of transaction: ------------------------------------------------------------------------ 5) Total fee paid: /X/ Fee paid previously with preliminary materials. / / Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 1) Amount Previously Paid: ------------------------------------------------------------------------ 2) Form, Schedule or Registration Statement No.: ------------------------------------------------------------------------ 3) Filing Party: ------------------------------------------------------------------------ 4) Date Filed: ------------------------------------------------------------------------ 2 Monsanto ---------------------------------------------- Monsanto Company ROBERT B. SHAPIRO 800 N. Lindbergh Boulevard Chairman and St. Louis, Missouri 63167 Chief Executive Officer (314) 694-1000 March 14, 1996 Dear Monsanto Shareowner: By all measures, last year was an outstanding one for Monsanto's shareowners. As you'll see in the Annual Report, our business performance produced the highest earnings in our Company's history, and our stock's total return substantially outpaced that of the Standard & Poor's 500 Index. We're now taking the following steps to build on that momentum and to create additional shareowner value: Because we believe that Monsanto stock continues to be an attractive investment, we plan to resume our stock repurchase program and have Board authorization to buy back over 8 million shares. We also want to tie our compensation programs to shareowner value even more tightly than in the past. Two actions are planned. The first is a stock option grant for about 27,000 Monsanto employees who don't currently receive options. This will give a much larger group of our people a direct economic stake in our shareowners' success. The second is a total revamping of our compensation program for senior management. Shareowner approval of the Monsanto Management Incentive Plan of 1996 (the Incentive Plan) and the Monsanto Executive Stock Purchase Plan (the Purchase Plan), which are described in detail in the proxy statement, will enable Monsanto to grant premium priced stock options to senior executives at exercise prices substantially above current market, and will enable executives to make leveraged purchases of Monsanto Common Stock. Premium priced options under the Incentive Plan may be exercised only if the ----------- Company's stock meets or exceeds specific price targets within prescribed - ------------------------------------------------------------------------- times. They can only be exercised at or above the target stock price. For - ------ executives to gain from these options, the stock has to exceed these price targets. This contrasts dramatically with conventional stock options, which are typically exercised at the price of the stock on the day the options were granted. 3 The table below demonstrates the clear alignment between management and shareowners that results from the use of premium priced options:
Gain to Gain to Shareowner Maximum Years to Participants at Value From Percent of Grant Premium Exercise Price Attain Exercise Price Exercise Price $135/share - ----------------- ----------------------- ---------------------- ------------------ ------------------- 20% $150 3 $0 $1.8 billion 30% $175 4 $15 million $4.7 billion 30% $200 5 $52.5 million $7.7 billion 20% $225 6 $112.5 million $10.6 billion - ------- Assumes options granted on 3 million shares Assumes 118 million shares outstanding; $135 was the closing price of Monsanto's Common Stock on March 1, 1996
Under most option-based incentive plans, executives share in the upward opportunities of stock ownership, but not in the downward risks. Under the Purchase Plan, participants will stand alongside shareowners in both risk and reward. To do so, participants must purchase a substantial amount of Monsanto shares using full-recourse loans financed by the Company. The Purchase Plan offers participants financial incentives based two-thirds on long-term stock price performance and one-third on retention. The total incentives can't exceed the amount to be repaid under the loan agreement. None of the performance portion of the incentive will be paid unless the total return to Monsanto's shareowners through the year 2000 is at or above the total shareholder return of companies at the 50th percentile of the Standard & Poor's Industrials. For maximum incentives, Monsanto's total shareholder return must be at or above the 75th percentile. This means that the Company's stock must perform well for all shareowners in order for the Purchase Plan to pay off for executives. You'll also note in the proxy that we're asking for authorization for additional shares. This will give us the flexibility we need to react quickly to opportunities that will benefit our shareowners, and permits us to consider a stock split in the range of four- or five-for-one. Finally, as explained on page 25 of the Annual Report, we're adopting Economic Value Added as our new financial measurement system. We expect this approach to drive decisions that increase shareowner value. Taken together, these actions will motivate aggressive business performance that will benefit all shareowners. Sincerely, /s/ Robert B. Shapiro Robert B. Shapiro Chairman and Chief Executive Officer -----END PRIVACY-ENHANCED MESSAGE-----